By Nikos Tzabouras at FXCM
Manchester United is one of the most successful British football clubs, but has steered clear of triumphs in recent years – the last time it conquered the Premier League was in the distant 2013. Adding to the dismay, Manchester United has seen same-city rival Manchester City dominating the top domestic league, winning seven titles since the start of the previous decade.
This year’s performance has been very poor, with coach Erik Ten Hag and some players receiving heavy criticism.
The Red Devils currently occupy sixth place in the Premier League with just nine victories and seven losses, while their presence in the European competition has also been disappointing.
The terrible showing in the 2023/2024 UEFA Champions League came to an end after a bitter defeat from German Bayern Munich at Old Trafford. Manchester United was eliminated from the next stage (round of 16), finishing at the bottom of Group A, with only one victory and a draw.
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Economic impact on Manchester United shares
The lack of success at the group stage and the failure to advance to the knockout phase means less money for the NYSE-listed club. Teams receive €2.8 million each for every win in the group stage of the UEFA Champions League and €930,000 for every draw in the current 2023/2024 season.
Furthermore, Manchester United missed out on at least €9.6 million, which it would receive if it had advanced to the next round. Coming in last also means that it won’t make it to the second-tier Europa League either, which would have resulted in a €500,000 influx.
The last time the club participated in the top European competition was in the 2021-2022 season, when it had managed to advance to the round of 16 teams, playing two extra matches. Manchester United did not participate last year (2022-2023) though, resulting in lower broadcasting revenue.
Although Manchester United achieved record revenues in fiscal 2023 (July 2022-June 2023), broadcasting dropped 2.7% y/y to £209.1 million (roughly €240 mln).
What does this mean for the sale of Manchester United?
Manchester United is one of the most famous and valuable clubs in the world, being publicly traded on the New York Stock Exchange for more than a decade, and has a market capitalization in excess of $3 billion. It generated record revenues of £648.4 million in FY2023, up 11.2% y/y, and is expected to set new all-time highs in the current fiscal 2024 (£650-£680 million).
However, the lacklustre on-field presence in recent years does not sit well with fans and there are constant calls for an ownership change.
Former player and team icon David Beckham favours such an outcome, saying that “it’s the right time for somebody else to take over” and return the Red Devils to glory.
A year ago, the Glazer family formally announced it was exploring “strategic alternatives” that included a sale of the club. Despite news that a deal is close, no agreement has been announced yet and it looks like it won’t lead to a majority ownership change.
According to a recent report from Sky News, INEOS founder Sir Jim Ratcliffe is set to acquire a 25% stake in the company in a £1.25bn deal. It will be interesting to see if the team’s elimination from the Champions League acts as an accelerator.
The stock of Manchester United had posted its best month in November of 2022, after the club opened the door to a potential sale. It runs a losing 2023 though, and news around this process has created volatility.
